Background
The strategic position of any company is crucial to get judged. Doing so will allow in analysing the status and the operational efficiency that the company has been passing through. Analysing the strategic position of any company will enable the stakeholders to make an efficient judgement about the power of the brand and the positive or negative impact that gets created about such a company or brand within the minds of the customers or stakeholders. A successful company like JD sports must take into consideration the need to collaborate with successful strategies which would enable them to perform in a successful context within the elevated marketplace.
This segment of the paper emphasises analysis of the strategic position caters for the needs of the stakeholders and creates the route by which they remain pleased about making decisions whether to utilise the commodities and services offered by such business corporations or to switch to different rivalry brands (Oh and Kang 2020). This particular research assignment will discuss in a broader context the effective strategies that JD sports undertakes between the period 2017 to 2021. Some of the strategic options that are available in front of the company to render its operations within the market effectively will also be discussed in this research paper with appropriate recommendations at the end that justifies the purpose and importance of accommodating efficient strategic decisions.
JD sports focuses on building a certain collaborative approach by aligning their activities with various third-party companies or brands. The main idea is to offer the target customers with all sorts of products that adds to the values and keeps a constant check towards the development of the curated proposition that the company holds within a particular business market. The strategic analysis that is going to be performed in this research paper involves the internal analysis, the external analyses, the financial analysis and the cultural and stakeholder analysis as well.
Strategic analysis of JD Sports
The business establishment remains very popular among the common people, and the company stores located in Ireland remain responsible for selling different kinds of sportswear and sporting products (Parent et al. 2019). In order to examine, ascertain, and execute business decision making established by top management, JD Sports employs a top-down strategy. Operations at JD Sports are standardized and conveyed to lower-level staff who execute these tasks. As a result, JD Sports effectively handles its projects. Furthermore, firms are always confronted with the repercussions of exaggerated risks. JD Sports, on the other hand, focuses on risk reduction, and as a result of strategic decisions made by top management, risk is reduced dramatically. JD Sports is suspected of relying on the executive tier to determine ways to prioritise, regulate, and undertake regular procedures, depending on the use of a top-down approach. Different types of strategic decisions that are undertaken by any company like JD sports remains concerned about the techniques or the path that the management of such a company undertakes to place it in a good position in terms of resource and product market. During the 2017-to 2021, JD Sports undertook several decisions that left both positive and negative impacts on the company’s operations.
Part 1
External analysis
Dynamic Appeal to the Global Market
JD” s principal fascia remained in transforming themselves as the global leader in the field of retail sports fashion footwear and appraisals within Ireland and UK. Having the plan to scatter its network of operations by the end of 2021 in New Zealand and Canada it is very crucial for the company to hold its momentum and carry the flag notwithstanding any sort of operational risks are restrictions. Acquisition of “One Point Five Ventures Limited in Canada will provide a subsequent platform to the business corporation in anticipating the market positions” and become global leader easily (Shackelford and Greenwell, 2015).
JD sports wishes to retain its global dynamic appeal by forging proper and deep connections with all its stakeholders and consumers. This can be done on behalf of the company with the help of continued investments in managing the store portfolios by working constantly with the help of digital technology. The company also has plans to elevate its market position by giving a proper customer experience and nurture good relationships with its clients by series of authentic services and commodities at differentiated destinations.
Technological Factors
Technological initiatives undertaken by the company are also commendable. Patents protection and intellectual property rights should be higher to create a positive impact on the stakeholders of the company (Zhu 2020). This has been possible only by the use of digitised technologies that the company implemented at its working arena. Empowering the supply chain of the partners. This situation enabled the suppliers of JD Sports to promote a successful range of Fashion marketing and make the suppliers happy with returns from the company’s perspective. Minimised production cost. Development and research initiatives should be top class, thus ensuring that the company responds according to the needs of the key players from the market.
Economic Factors
Changing taxation policies about the trade, by different government officials from time to time often makes the company more vulnerable within the market. JD Sports must prepare ways to maintain eventuality by keeping in mind the government’s priorities. Constant scrutiny and monitoring are also essential to regulate the costs associated with operations. External analysis of JD Sports has been performed by keeping in mind the concept of PESTLE analysis. Such kinds of analysis will help the business corporation analyse the external decisions effectively with strategic implications.
Having a very strong supply chain enables JD sports to execute their manufacturing and delivery process at the peak level. The reliable suppliers of the materials of this company remain in the form of Adidas or Nike who focus upon maintaining highest standards about the products and are more inclined towards ethical sourcing (Oh and Kang 2020). The management of the company is more responsible in engaging the suppliers who remain committed to their work and free from any bargain. JD sports continuously focuses upon reviewing its regulations and policies on a timely basis and enables ethical sourcing at the highest peak level. Networking on highest stakes and maintaining the records on quality and timely basis by enabling the cash flow to integrate remain some other strengths in front of JD sports.
External Analysis
Culture Analysis
According to the company’s management, collaborative effort is at the foundation of how JD Sports operates, whoever they engage with, as well as what the company strives for. JDs are focused on exceptional teamwork, that seek to work directly with their clientele as an extension of their own. Rather than “I” or “my,” JD Sports concentrates on “ours” and “us.” Nevertheless, several staff have stated that JD Sports pays too little, has no agility with switch of shifts, is difficult to get time off granted, and shows blatant bias via management toward particular employees. Management is reluctant to communicate with employees, does not understand how to properly manage a team, and seldom expresses gratitude or praise. JD is known for its “cliquey” culture.
Development of the market creates space for any successful company like JD Sports to join newer and better markets and at the same time employ the existing product. The period from 2017-to 2021 allowed JD Sports to search for more customers having the same kinds of needs and preferences. JD Sports successfully expanded its market but suffered a lot of difficulties and requirements to search for newer and better competencies. Diversification of the market will enable the company to remain saturated about different kinds of actions where the products have the chance to reach the end cycle of the product.
Stakeholder Analysis
Strategic decisions are undertaken by the company mainly remain concerned about how the company would get positioned within the market. JD Sports have separated its stakeholders in four distinctive parts. The following points highlight the stakeholder ki response on behalf of JD Sports.
- Buyers -. JD Sports’ primarily target audience seems to be the 25 and below, but owing their mentality acting to be fashion-forward, different clothing apparels sold by them reaches to a wide range of people. JD Sports “Foot patrol fascia” successfully makes the way to leverage into the increasing streetwear trend that is prevalent amongst 30years and below. These buyers enjoy the power to the extent where buyers are found to be exerting powers about a certain product within the sports industry Presently buyers of JD Sports regulate the market to a vivid extent and successfully cut the prices to a great extent. With constant changes within the socio-economic groups, product differentiation has the chance to regulate the operations of the company.
- Suppliers – Their house brand Supplier Terms & Conditions incorporate the JD Sports Plc Code of Conduct, plus the basic standards are outlined by them. The JD Group would only engage with vendors that agree to abide these standards, that are based on guidelines established by the International Labour Organization. With suppliers like Adidas and Nike the company is planning to prepare newer and better products so that it can meet the needs of the customers and acquire a significant position of the market.
- Employees – They are responsible for executing the daily operations. The employees strive to put more impact ethical outsourcing and enable more opportunities from the global market.
- Local community – JD Sports has built out a unique identity for itself by focusing on more trendy sportswear, in comparison to industry leader Sports Direct’s primarily value-oriented stance. JD takes pleasure in its extensive community relations, which it has transformed into a competitive edge. JD sports incorporates a robust CSR to secure the chances of performing actions in a serious context.
Financial Analysis
The financial part of JD Sports can be monitored based on market trends and dividend structure. Such data can be collected from the income statements provided by the company. According to the latest market reports, JD Sports have achieved the feat to represent itself in the international market context with 29% annual revenues (Oh and Kang, 2020). Different retailers slashed the prices to boost sales and preferred to identify a position so that they could go to any destination with premium and quality products. The core target of JD Sports within the markets where it is operating remains under -25s. Since it is more or less a fashion-based sportswear company, therefore, it remains attractive to every demographic where it operates. The national sales fell 2.80 percent to £2.50 billion in the 2020 fiscal year, owing to the Coronavirus epidemic and the termination of non-essential retailed locations, and productivity was commendable but modest. Overseas activities were also affected, although the company nevertheless succeeded to increase by 3.70 percent to £3.60 billion in FY2020.
Internal Analysis
JD Sports dividend history suggests that the company has remained stagnant in providing timely dividends to all its employees from time to time. During the year 2016, the company paid a dividend of approximately 0%, but after that, the company was capable of providing the dividends to a good amount (Balasubramanian et al. 2015). During the year 2017, approximately 1.55% dividend was paid on behalf of the company. 2018 and 2019 saw dividends paid nearly 1.71% and 0.28%, respectively. During the year 2021 aggregate dividend percentage was nearly 1.44%. After going through the market perspectives of the company, it can be found that JD Sports’ overall participation is on a rising trend. The aggregate market share of the company is on the verge of getting bigger and better based on a globalised market share.
JD Sports has keep trying so that improvement can be made. JD Sports must take aggressive approaches and strategies related to acquisition so that the long-term objectives and goals on behalf of the entity can be easily achieved. It is also essential that JD Sports avoids any sort of campaigns associated with competition because of the power that regulatory bodies can overcome any aggressive approaches taken by any rival company.
Option 1: Enhancing Perceived Value of the Company
Current strategy adopted by JD sports focuses on the company’s initiatives in scheduling its network of operations and investing in various projects that provide a large number of returns in the books of accounts of the company. In order to identify the strategy opinion that is available in the hands of the company the SAF model has been used.
1
The 1st option speaks about considering the company as a normal brand that strives to enhance its reputation with the passage of time.
2
This option basically speaks about the concept of suitability. As the company is operating irrespective of negative attributes and is planning to shift its stakeholders’ understanding and perspectives against the directive and principles of the company will definitely solve the problem.
3
This option is mainly associated with remaining acceptable about the demands raised by the stakeholders especially at times of risk. Doing so ensures in mitigating the allegations made by the stakeholders and derives every opportunity that is acceptable.
Stakeholders for:
Consumers – They are responsible for making the ultimate option about whether to carry on with the existing products or services or to shift to other brands. Thus, the reputation of JD Sports depends a lot upon the consumers.
Culture Analysis
Investors
Risks-averse related to the shareholders Arup informed on behalf of the decisions made ultimately enhances the confidence of any particular company.
Authorities and Organization
This form of shareholders are responsible for supporting every decision made on behalf of the company because they consider the decisions to be beneficial in the long run.
Shareholders Against
Investors
They might not support the decisions of investment because of the concerns related to returns from any particular company. Taxation policies have enhanced the chances of JD Sports to successfully collaborate with different organisations to contribute successfully towards the community’s goals. Regulations that get changed due to imminent threats or disruptive supply changes need to be addressed by the company effectively.
Consumers
When it matters about the preferences and requirements not getting fulfilled by the company the consumers might revolt.
Organizations
They might turn around because of their preferences not getting fulfilled.
Option 2: Opting for Mergers and Acquisitions
JD Sports can adopt several processes to keep the pace of inorganic growth at the utmost potential. During the merger, JD Sports must combine the aspects related to shareholders and the organisation simultaneously. As JD Sports have already lost high amounts of profits therefore, integration about different kinds of mergers and firms need to be addressed effectively to make JD sports the room to collaborate in a highly competitive market.
If the company proceeds with second option, then JD Sports might land into deep trouble. The 1st option remains to be pretty feasible (Zhu 2020). Risks of JD Sports remain in the form of constant new entrants entering the markets and on a fast segment. As the barriers of entry are very low, therefore, the company always remains under pressure about the threats associated with the high amount of availability of substitute products. Threats related to substitute products might change the overall demand for the commodities made available by the company. With rivalries of JD Sports becoming more and more intensive, presently low switching cost, the similarity of the products, poor barriers of entry, maturity market and broader competitors within the market are noticed. These risks can be easily managed by taking into consideration the industry attractiveness.
Conclusion
This particular research assignment paper analyses different strategic features associated with JD sports. Hence it can be concluded that JD Sports must continue to perform the acquisition techniques in a continuous process. The company needs to complete its acquisition of sports brands and treat competition within the market as a part of operational efficiency to ease the pressures. The way this company performs its business functions by keeping in mind that internal and external factors have stayed as a constant part of the discussion within this research paper an analysis of approximately five years have been made to find whether JDS sports is performing on the right track. The company must look for newer and better opportunities and must take into consideration the initiative of restructuring and rebranding itself.
As JD Sports have an enormous amount of experience and ideas related to expansion therefore, it can enter markets and enhance its market shares by the use of utilising approachability to internationalisation.
References
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